USD/JPY: Ueda caution and Oil risks in focus – BNY

Finance

USD/JPY: Ueda caution and Oil risks in focus – BNY

BNY‘s Head of Markets Macro Strategy Bob Savage highlights comments from Bank of Japan (BoJ) Governor Kazuo Ueda stressing vigilance over higher Oil prices and global financial instability. While Japan’s economy and inflation remain broadly on track, Ueda warns that a prolonged Middle East conflict could disrupt supply chains and output, and says the BoJ will closely monitor conditions ahead of its late-April policy meeting.

BoJ flags risks from Oil shock

“BoJ Governor Kazuo Ueda has highlighted the need for vigilance amid rising crude oil prices and global financial market instability caused by the escalating Middle East conflict.”

“While Japans economic and price developments remain roughly on forecast, Ueda warned that a prolonged war could disrupt supply chains and factory output, impacting the economy.”

“He noted that higher oil costs may have mixed effects on underlying inflation, depending on output gaps and inflation expectations.”

“Ueda emphasized close monitoring of the situation‘s impact on the economy, prices and financial conditions ahead of the BoJ’s April 27-28 policy meeting.”

“Japans preliminary money stock data for March 2026 show M2 and M3 increasing by 2.0% y/y and 3.7% y/y, respectively, up from 1.7% and 2.0% in February.”